Denials: Simplifying a Complex Challenge

F or many teams, managing denials can feel like an endless chase. Staff spend so much time tracking down, researching, and resubmitting claims that there’s often little room left for anything else—let alone strategic improvements. Yet, every unrecovered denial represents missed revenue and wasted effort that hospitals can’t afford to lose.  

Denials are one of the most complex parts of the revenue cycle. Rules and requirements vary widely depending on payor mix, case mix, contracts, and even local coverage determinations. Instead of getting lost in those differences, let’s focus on practical, broadly applicable best practices that can help any facility improve performance—especially when it comes to appeals.

With studies showing that nearly 24% of denials are unrecoverable, developing a strong and efficient appeals process is essential for recapturing the remaining 76%.

Here’s how your team can start strengthening its denial management strategy:

1. Build a Strong Foundation with Clear Business Rules

Every effective denial management program starts with clarity. Establishing a well-defined set of business rules ensures consistent, confident decisions across your team. Begin by asking:

• Which claim adjustment reason codes are worth appealing—and which aren’t?
• Do certain payors or denial types require specialized handling?
• What’s the minimum dollar threshold that justifies an appeal for a particular payor or patient category?

Eliminating ambiguity helps staff act faster and focus efforts where they’ll have the biggest financial impact.

2. Evaluate the True Cost of Pursuit

Each week a denied claim sits unresolved, your hospital’s revenue potential declines. While some accounts must remain open briefly for remit activity, appeals should ideally begin within one week of that process completing.

Performing a cost analysis helps determine when the effort outweighs the reward. Understanding the cost-to-collect for each appeal type ensures resources are allocated where they’ll make the most difference—preventing wasted effort on low-value pursuits.

3. Monitor, Measure, and Train

Even small back-office teams benefit from consistent performance monitoring. Regular oversight highlights staff strengths, helps balance workloads, and uncovers opportunities for training. For example, identifying which team members are most successful with certain appeal types can guide targeted coaching and task assignments for greater efficiency.

4. Benchmark and Adjust

Continuous improvement depends on data-driven evaluation. Routinely review success rates, administrative effort, and overall return on investment to refine your business rules. Benchmark your results against peer facilities or national metrics to set realistic goals and measure progress over time.

Ready to Strengthen Your Denials Strategy?

MEDTEAM helps hospitals streamline enterprise-wide revenue cycle management, from front-end workflows to denial resolution.

Reach us at inquiry@medteamsolutions.com or call 1.844.615.1803 to learn how we can help your organization recover more—and work smarter doing it.